The Postal Service isn’t licked yet

The U.S. Postal Service is in big financial trouble, warning that it could be insolvent by the end of this month, when its latest pension bill is due (the service, by law, must fully pre-fund retiree health benefits, which most employers, even government ones, don’t do) The White House is said to be working on a plan to avoid default.

In the meantime, NPR’s Corey Dade offers five things the Postal Service can do to reinvent itself for an e-mail age in which demand for its services is down. They include:

Ending Saturday mail delivery;

Ending or lowering the mandate to pre-fund retiree health benefits;

Restructuring health and pension systems (and getting the federal government to refund $7 billion in overpayments);

More discretion over delivery schedules and work hours; and

More retail services (post offices in Europe, for example, offer things like insurance and Internet access).

What do you think? Would you mind a scaled back postal service? A privatized one altogether? What do you think the agency should do?

Do you think the U.S. Postal Service should remain a government entity?

3 Responses

There is one thing that has been driving the USPS to insolvency. A provision in the PAEA of 2006 that required the USPS to PREfund FUTURE retiree health benefits. This provision takes $5.5 Billion out of USPS revenue every year. If not for this requirement made by CONGRESS, the USPS would have actually had a profit of around $800 Million over the past 4 years. This $55 Billion fund is meant to ensure the funding for FUTURE retirees for the next 75 years. In essence, USPS is being required to put money aside for people who do not work for USPS yet and some that aren’t even born yet. This fund was to be paid in only 10 years. There is no other business or organization anywhere that has to make such payments.

The USPS has also, due to a flaw in the formulas, OVER paid into the two pension funds by over $60 Billion. You can do the math here, and so can Congress. Congress will not talk about these over-payments or pre-funding requirements. They’re too busy paying lip service to their constituents about keeping little bitty Post Offices open.

Cut out the PAEA funding and return the over-payments. Then, since there is already $23 Billion in that fund, USPS can take that $60 Billion and put $22 Billion into the future retiree health benefit fund, pay off the debt to the Treasury of $15 Billion and still have some left over for a rainy day.

But this is too simple for Congress to grasp. They, as well as the public, grab onto the Union Contracts as being the bane of the USPS. In specific, the No Lay-off clause. Think about this. When the last agreement expired in November 2010, hiring was frozen. Anyone on the rolls prior to that is protected against being laid off. Once the contract was ratified, hiring resumed. Those newly hired are not covered by the no lay-off clause, Besides, who would be laid off first anyway? That’s right, the new people.

Another thing you don’t realize in characterizing the Unions as evil money grubbing monsters. The APWU, realizing that we are all in this together gave up some financial issues to help with this problem. Specifically, we will be paying a larger portion towards our health benefits which, contrary to popular belief, were never, ever paid in full by the USPS. We also waived any Cost of Living Adjustments for all of 2011. COLA for 2012 is deferred until the same period in 2013. Our first chance of a raise is only if inflation causes the CPI to rise. The first general wage increase will be 1% starting in November 2013. That will make 3 years that APWU represented workers have gone without any raise in salary. Definitely the sign of evil money grubbing monsters. We’re feeling the pinch too.

The blame lies solely with your CONGRESS. If you really want to do something, contact your representative and senator and urge them to support H.R.1351 which will go very far in resolving the current problem and resolve the over-funding problem.

In the latest contract, the APWU agreed to allow the USPS to hire a greater percentage of temporary workers as well as allowing management to post and fill “Non-Traditional” jobs. These jobs could be 4 10 hour days, or 5 6hour days and a 10 hour day or even just 5 6 hour days. Workers only need work a regular schedule of 30 or more hours to be considered full time.

This allows the USPS to fill positions that may not have 8 hours of work every day. It alleviates the problem of having a worker on Stand By for 2 hours every day. I am sure that you have heard about the USPS paying workers to do nothing. Sure doesn’t sound like a stonewalling tactic to hold the USPS hostage to a contract.

Also consider that USPS Management agreed to the terms of this contract just a few months ago as something they could live with as well as the APWU.

The fact that the USPS needs to come to grips with the new age it can not continue to be in every town and village it is time go back to the future let hardware and general store become post office in small towns. By law USPS can not be in business other mail related. Please stop the nonsense that by closing a Post office that does not have the traffic to pay it bills it is some kind of crime. Let them stop Sat Delievery

Someone had the pretty good idea of moving small-town PO’s, scheduled for closure, into other local businesses, even for a small fee since it would attract business customers to their business. The PO’s overhead costs of owning these buildings would then be eliminated.